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Every community has a fringe of crazies. I remember back when I first got into audio in high school, when I bought my first pair of >$10 headphones and suddenly I could hear details in music that weren't there before, and wondering how deep the rabbit hole went. I started reading audio forums and saw that most postings came from a small number of extremely active posters that made absurd, hyperbolic claims. There's a product review that has since become a meme, about some ridiculous $1000 RCA cables, how they sounded "smoky" and "danceable". I read that when it was first posted and felt disgusted. Then the moderators of the forum I read most often announced that any discussion of double-blind testing was banned and anyone who discussed it would immediately be banned. I deleted my account on that forum. What a disappointment. But the fact that fringe crazies exist doesn't mean the subject is all a joke. Car tuning is a legitimate hobby, even though I have idiot cousins who will physically assault anyone who questions the purpose of their undercarriage neon lights. And there is a difference between junk audio equipment and good audio equipment, even though there is also plenty of snake oil under the label "audiophile".

I can genuinely tell the difference between 320K MP3 and CD, and between CD and HD, (a group of enthusiasts got together and double-blind tested each other) but only in carefully controlled circumstances with a LOT of focus. As in, wearing really good headphones in a silent distraction-free room with my eyes closed and focusing on particular features like cymbals and chimes and staging, and even then only after switching back and forth between samples a dozen times. So after realizing that, I always aim to have CD quality, but I couldn't care less about HD audio. And like you said, $100 Craigslist systems from 1990 sound drastically better than modern consumer-grade systems. People started caring more about "smart" convenience features and less about sound quality a long time ago.